Murphy USA Inc., a leading marketer of retail motor fuel products and convenience merchandise, announced financial results for the three and nine months ended September 30, 2024.
Key Highlights:
Net income was $149.2 million, or $7.20 per diluted share, in Q3 2024 compared to net income of $167.7 million, or $7.69 per diluted share, in Q3 2023
Total fuel contribution for Q3 2024 was 32.6 cpg, compared to 34.5 cpg in Q3 2023
Total retail gallons increased 2.0%, and volumes on a same store sales ("SSS") basis increased 0.5%, in Q3 2024 compared to Q3 2023
Merchandise contribution dollars for Q3 2024 increased 2.4% to $216.8 million on average unit margins of 20.0%, compared to Q3 2023 contribution dollars of $211.8 million on unit margins of 20.1%
During Q3 2024, the Company repurchased approximately 244.4 thousand common shares for $126.4 million at an average price of $517.17 per share
The Company paid a quarterly cash dividend of $0.45 per share, or $1.80 per share on an annualized basis, on September 5, 2024, a 2.3% increase from June of 2024, for a total cash payment of $9.2 million
On October 24, 2024, the Company announced a quarterly cash dividend of $0.48 per share, or $1.92 per share on an annualized basis, reflecting a 6.7% increase from the prior quarter. The dividend is payable on December 2, 2024, to stockholders of record as of November 4, 2024
“Strength in our core categories continued to drive Murphy USA’s advantaged business model in the third quarter,” said President and CEO Andrew Clyde. “Retail fuel margins were over 3 cpg higher than 2023, and per store volumes grew 1.1%, as pricing dynamics continue to reflect higher industry breakeven margins. Within the Murphy branded stores, total merchandise margin dollars were up 5.9% reflecting strength in both nicotine and non-nicotine categories while there were continued headwinds in the Northeast QuickChek markets. As our innovation and business improvement initiatives take hold, our network grows, and we continue to take share on key categories, we are well-positioned to compete and win with our value-conscious customers. We are accelerating our new-store build program in 2024 and 2025, which is generating strong returns and remains the primary growth driver of the business over the next five to ten years.”
Net income and Adjusted EBITDA for Q3 2024 declined versus the prior-year quarter, due primarily to lower total fuel contribution and higher store operating expenses, which were partially offset by higher retail fuel volumes and higher overall merchandise contribution.
Fuel
Total fuel contribution dollars of $404.2 million decreased $14.8 million, or 3.5%, in Q3 2024 compared to Q3 2023 due to lower total fuel contribution margins partially offset by higher retail volumes sold during the period. Retail fuel contribution dollars increased $47.1 million, or 13.5%, to $395.7 million compared to Q3 2023 due to higher retail fuel margins combined with higher volumes sold. For Q3 2024, retail fuel margins were 31.9 cpg, an 11.2% increase versus the prior-year quarter, and overall retail volumes were 2.0% higher in Q3 2024 compared to the prior-year quarter. PS&W contribution including RINs decreased $61.9 million when compared to Q3 2023, primarily due to negative impacts of timing and inventory pricing adjustments in a falling market.
Merchandise
Total merchandise contribution increased $5.0 million, or 2.4%, to $216.8 million in Q3 2024 compared to the prior-year quarter, due primarily to higher merchandise sales. Total nicotine contribution dollars in Q3 2024 increased 5.3% and non-nicotine contribution dollars were relatively flat compared to Q3 2023. Total merchandise contribution increased 1.2% on a SSS basis in the current quarter compared to the prior-year quarter.
Other Areas
Total store and other operating expenses were $10.5 million higher in Q3 2024 versus Q3 2023, mainly due to employee related expenses and store maintenance costs combined with new store growth, partially offset by a reduction in payment fees. Store OPEX excluding payment fees and rent on an APSM basis were 4.0% higher versus Q3 2023, primarily attributable to increased employee related expenses and maintenance costs.
Store Openings
Cash balances as of September 30, 2024 totaled $52.5 million, and the Company also had total marketable securities of $1.5 million. Long-term debt consisted of approximately $298.7 million in carrying value of 5.625% senior notes due in 2027, $496.3 million in carrying value of 4.75% senior notes due in 2029, $495.1 million in carrying value of 3.75% senior notes due in 2031, and $378.7 million of term debt, combined with approximately $110.2 million in long-term finance leases. In addition, long-term debt included $41.0 million in outstanding borrowings on our revolving credit facility as of September 30, 2024.
At September 30, 2024, the Company had common shares outstanding of 20,249,099. Common shares repurchased during the quarter were approximately 244.4 thousand shares for $126.4 million. Common shares purchased during the nine months ended September 30, 2024, were approximately 698.9 thousand shares for a total of $320.4 million. As of September 30, 2024, approximately $1.1 billion remained available under the existing $1.5 billion 2023 authorization.
The effective income tax rate was approximately 24.9% for both Q3 2024 and Q3 2023.
The Company paid a quarterly cash dividend on September 5, 2024 of $0.45 per share, or $1.80 per share on an annualized basis, a 2.3% increase from the previous quarter, for a total cash payment of $9.2 million. The total amount paid in dividends year-to-date is $27.1 million, or $1.31 per share.
2024 Guidance Update
Concurrent with the earnings release, the Company is also updating our full-year capital expenditure expectations to a range of $500 million to $525 million, up from the original guided range of $400 million to $450 million, due primarily to the successful efforts of our team to pull forward some future projects into the current year in addition to getting an earlier start on next year's build class.
In addition, we are revising our guidance for our full-year SG&A expenses to a range of $240 million to $250 million, down from the original guided range of $255 million to $265 million. The reduction is primarily due to lower employee costs, including both salaries and benefits, as well as the timing of certain initiatives.
All other previously issued guidance metrics remain unchanged.
Earnings Call Information
The Company will host a conference call on October 31, 2024 at 10:00 a.m. Central Time to discuss third quarter 2024 results. The call can be accessed via webcast through the Investor Relations section of the Murphy USA website at http://ir.corporate.murphyusa.com. If you are unable to attend via webcast, the conference call number is 1 (888) 330-2384 and the conference ID number is 6680883. The earnings and investor related materials, including reconciliations of any non-GAAP financial measures to GAAP financial measures and any other applicable disclosures, will be available on that same day on the investor section of the Murphy USA website (http://ir.corporate.murphyusa.com). Approximately one hour after the conclusion of the conference, the webcast will be available for replay. Shortly thereafter, a transcript will be available.
